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The U.S. Federal Laboratory System
This chapter briefly summarizes the historical, statutory, and organizational framework of the contemporary U.S. federal laboratory system. It highlights those aspects of the statutory and organizational framework most relevant to technology transfer and commercialization in the context of digital products.
HISTORY AND EVOLUTION OF THE FEDERAL LABORATORIES
As noted in Chapter 1, a federal laboratory is defined as “any laboratory, any federally funded research and development center (FFRDC), or any center that is owned, leased, or otherwise used by a Federal agency and funded by the Federal Government, whether operated by the Government or by a contractor” (15 U.S.C. § 3703). As public institutions, the federal labs are mission driven and engaged mainly in basic, foundational research that many private firms are unlikely to undertake. Some have played national security roles.
Beginning with the establishment of the Smithsonian Institution in 1846, the modern federal laboratory complex developed steadily over the 19th and 20th centuries and contributed to advances in science and technology that defined the nation during that period. Less than two decades later, in 1862, the Department of Agriculture was created, ushering in the Agricultural Research Service and the Public Health Service (now the National Institutes of Health) shortly thereafter in 1887. Each of these well-known federal institutions manages labs that have had significant impacts on the everyday lives of the American public. Several labs opened later under the auspices of the War Department (and later were transferred to what became the Department of Energy [DOE]). These labs, which included Ames, Argonne, Lawrence Berkeley (Radiation Lab), Los Alamos, Oak Ridge, and Pacific Northwest (Hanford Laboratory), were run by contractors and were critical to the World War II Manhattan Project, splitting uranium atoms and developing the atomic bomb.
Federal labs have long played a key role in technology development. In the field of computing, technological breakthroughs enabled by the focus of the federal labs on basic research have led to such important developments as the first electronic digital computer, ENIAC, developed by the Ordnance Ballistic Research Laboratory of the U.S. Army in collaboration with the University of Pennsylvania (Price and Siegel, 2019). The invention of touchscreen technology that can be manipulated with a finger or stylus was based on research conducted at Oak Ridge National Laboratory (Price and Siegel, 2019). The National Aeronautics and Space Administration’s (NASA’s) Ames Research Center, along with the Defense Advanced Research Projects Agency (DARPA), the Air Force Institute of Technology, the National Science Foundation, and National Institutes of Health (NIH), provided extensive funding for the development of virtual reality (VR) technology for uses ranging from gaming and entertainment, to medicine, to aerospace, to military applications (Price and Siegel, 2019). The Global Positioning System (GPS) signal that powers navigation applications around the world was originally developed by the U.S. Navy and continues to be maintained by the Department of Defense (DOD) (O’Connor et al., 2019). And the scientific fields of genomics and related “omics” (e.g., proteomics, transcriptomics, metabolomics, pharmacogenomics), all of which run on data, owe their existence to the foundational work of federal agencies conducted before, during, and after the Human Genome Project (HGP) (Contreras and Knoppers, 2018). The U.S. component of the HGP was led by NIH and the DOE, which together provided $3.8 billion in funding over the project’s 15-year duration.1 The HGP, which published the first draft of the human genomic sequence in 2001, was heralded as one of the most important scientific projects of all time (Tripp and Grueber, 2013).
The federal labs also feature prominently in the nation’s emergency response plans of action for national and international emergencies, which have entailed securing at-risk nuclear materials in the former Soviet Union, assisting Japan in its response to the Fukushima nuclear reactor accident, responding to the international Ebola outbreak, and addressing oil and natural gas leaks in the United States. Most recently, the federal labs have played an important role in combating the COVID-19 pandemic by providing data, publications, medical expertise, research, technologies, and supercomputing capabilities to accelerate understanding, diagnosis, and treatment of the disease, as well as the development of a vaccine.2
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1 In addition to providing extramural funding, the U.S. government contributed to the HGP by providing curation and storage of genomic data within GenBank, operated by the National Center for Biotechnology Information (NCBI), part of the National Library of Medicine at NIH. GenBank originated in Los Alamos National Laboratory in the 1970s (Contreras, 2017).
2 DOE laboratories are part of the COVID-19 High Performance Computing Consortium, which is providing supercomputing systems to researchers for use in addressing the epidemiological, bioinformatics, and molecular modeling needs of the COVID-19 response (OSTP, 2020).
THE FEDERAL LABORATORY INFRASTRUCTURE
The current U.S. federal laboratory infrastructure consists of more than 300 labs that range from small, off-site facilities with staff of 10 or fewer scientists to sprawling complexes with thousands of scientists, engineers, and support personnel (Hughes et al., 2011). In fiscal year 2016, the federal labs accounted for 38 percent ($43.4 billion) of federal obligations for research and development (R&D) (more than $115 billion) (NIST, 2019a). Four agencies (DOD, DOE, the Department of Health and Human Services [HHS], and NASA) accounted for nearly 90 percent of the total federal lab expenditures (NIST, 2019a).
Eleven federal agencies have significant lab operations: the Department of Agriculture (USDA), the Department of Commerce (DOC), DOD, DOE, HHS, the Department of Homeland Security (DHS), the Department of the Interior (DOI), the Department of Transportation (DOT), the Department of Veterans Affairs (VA), the Environmental Protection Agency (EPA), and NASA. There is substantial variation across the laboratories—even within agencies and individual laboratories—with respect to their mission, culture, size, management, types of research, and types of output.3
GOVERNMENT-OWNED, GOVERNMENT-OPERATED (GOGO) AND GOVERNMENT-OWNED, CONTRACTOR-OPERATED (GOCO) LABORATORIES
Federal laboratories are a mix of GOGOs and GOCOs, which are governed by different legislative and regulatory schemes. These legislative and regulatory differences have resulted in a number of institutional differences with respect to the nature of operations, personnel obligations, and approaches to private-sector engagement related to technology transfer and commercialization, differences that reflect the priorities and constraints of the respective legislative and regulatory authorities (Snyder and Thomas, 2014; Hughes et al., 2011; Link et al., 2019).
GOGO laboratories are owned or leased by the federal government, and their personnel are considered federal employees. GOCO laboratories, on the other hand, are owned and equipped by the federal government but operated under contract by for-profit companies, nonprofit companies, and universities, either on their own or in consortia, and their personnel are not considered federal employees. Some GOCO laboratories are designated as FFRDCs, public–private partnerships that conduct research for the U.S. government. As of this writing, 12 federal agencies sponsor a total of 42 FFRDCs.
The different policy frameworks for GOGOs and GOCOs define the suite of legal tools available to secure, manage, share, and transfer digital
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3 A detailed discussion of the history and implications of these structural differences among federal labs is beyond the scope of this report.
innovations created by the federal labs where relevant. For example, both GOGOs and GOCOs are eligible to patent and license inventions, but only GOCOs that have secured the permission of their respective responsible agency are eligible to claim copyright protection.4
OVERVIEW OF THE RESEARCH ACTIVITIES OF THE FEDERAL LABORATORIES
The activities of federal laboratories vary widely, driven in part by agency missions and priorities and the types of research (basic or applied) and development they conduct. The labs’ mission activities also are driven by congressional appropriations, and their disparate missions may affect the propensity or ability of the private sector to use their research outputs in commercial products. Additionally, the nature of research conducted at the federal labs can range from open/unclassified, to restricted, to classified. Restricted and classified research, which have national security implications, generally are not transferred to the private sector.
The HHS labs vary greatly in mission and focus. Some NIH labs are engaged in fundamental research, while the NIH Clinical Center conducts more than 1,000 clinical studies each year to help transfer laboratory discoveries into routine use as patient treatments. The Food and Drug Administration’s intramural research program spans a range of sectors and functional utilities—from the development of animal models and tools to assessments of emergency medical equipment. Similarly, NASA operates labs with diverse missions that include supporting human spaceflight, developing space operations and related systems, testing the safety and efficiency of hardware, providing preflight training facilities, and conducting ground-based analog studies and furthering understanding of human responses to space travel.
Often, moreover, a single agency may have multiple missions. For example, the DOD labs conduct R&D in support of the national defense, with each service branch (Air Force, Army, Navy) operating several labs to meet its mission needs. Even a single lab can have multiple missions and multiple areas of focus for its research program. An example is the Idaho National Laboratory (INL), which conducts basic and applied nuclear and radiological science research, pursues developments in nuclear power, and evaluates new battery technologies for electric-drive vehicles, among other areas of focus.5
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4 Intellectual property issues pertaining to federal labs are discussed in greater detail in Chapters 4 and 5.
5 See INL Overview at https://factsheets.inl.gov/Shared%20Documents/overview.pdf#search=basic%20research.
TECHNOLOGY TRANSFER LEGISLATION AND POLICY RELEVANT TO FEDERAL LABORATORIES
Throughout the 1980s, Congress and the executive branch expanded cooperation among federal laboratories, academia, and industry in an effort to derive more value from federally funded R&D. The federal policy framework for the labs consists of several key pieces of legislation aimed at enhancing technology transfer of their innovations, including digital products.
The first key legislation is the Stevenson-Wydler Technology Innovation Act of 1980 (Pub. L. No. 96-480), which recognizes that “many new discoveries and advances in science occur in universities and federal laboratories” and encourages “cooperation among academia, federal laboratories, labor, and industry” through such mechanisms as “technology transfer, personnel exchange, joint research projects, and others” (Pub. L. No. 96-480).6 The act also mandates the creation of an Office of Research and Technology Applications (ORTA) at each lab with 200 or more technical staff to facilitate technology transfers,7 which the respective responsible agencies are required to fund.8 In addition, the act sets a cap on annual royalty awards (currently $150,000) for researchers at the federal labs.9
Second is the Bayh-Dole Act of 1980 (Pub. L. No. 96-517), which governs intellectual property for inventions developed with federal government funds. That act fundamentally changed the nation’s system of technology transfer by allowing contractors supported by the federal agencies to own such inventions and to issue exclusive licenses on those patents under certain conditions (see Chapter 4).10
Third is the Federal Technology Transfer Act of 1986 (FTTA) (Pub. L. No. 99-502), which amended the Stevenson-Wydler Act to strengthen technology transfer from the federal labs by providing that “technology transfer, consistent with mission responsibilities, is a responsibility of each laboratory science and engineering professional” (15 U.S.C. § 3701[a][2]), requiring technology transfer to be considered in employee evaluations (15 U.S.C. § 3701[a][3]), and establishing a principle of royalty sharing for federal inventors (15 U.S.C. § 3710c[a][1][a][i]). Passage of this legislation fortified the government’s focus on maximizing the value of federally funded technology through its utilization in real-world applications. The act’s royalty payment requirements were extended to nongovernmental employees at federal labs in the Omnibus Trade and Competitiveness Act of 1988 (Pub. L. No. 100-418; 15 U.S.C. § 3710[b]). In addition, the FTTA created a new technology transfer mechanism, the cooperative
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6 15 U.S.C. § 3701 et seq.
7 15 U.S.C. § 3701.
8 15 U.S.C. § 3710(b).
9 The National Technology Transfer and Advancement Act of 1995, Pub. L. No. 104-113, raised the cap from $100,000 to $150,000.
10 35 U.S.C. 209(e).
research and development agreement (CRADA), for GOGO labs. CRADAs enable the labs to engage in cooperative research with federal agencies, state or local governments, industry, and nonprofits—including universities—and to enter into advance agreements with businesses for patent acquisition or licensing rights to inventions resulting from the CRADA.11 The FTTA also allows current and former federal employees to participate in commercial development as long as there are no conflicts of interest (15 U.S.C. § 3710[a][b][3][c]).
In 1987, President Ronald Reagan issued Executive Order 12591—“Facilitating Access to Science and Technology”—which encouraged GOGO labs “to enter into [CRADAs] with other federal laboratories, state and local governments, universities, and the private sector” (52 Fed. Reg. 13414, 3 C.F.R., 1987 Comp., p. 220). It also established the Technology Exchange of Scientists and Engineers program, which allows government scientists to accept temporary assignments in the private sector and private-sector researchers to do the same at federal labs.
The National Competitiveness Technology Transfer Act of 1989 (Pub. L. No. 101-189) gave GOCO labs the authority to enter into CRADAs under terms similar to those that applied to GOGO labs. Subsequently, the National Technology Transfer and Advancement Act of 1995 (Pub. L. No. 104-113) provided that a CRADA partner collaborating with either a GOCO or a GOGO lab would, at a minimum, receive a nonexclusive license to any inventions arising from the collaboration.
There are other laws and policies that have an indirect impact on technology transfer from the federal labs. For example, export control laws restrict the dissemination of certain research developments and technical data generated by the labs. The Export Controls Reform Act of 2018 (Title XVII, Subtitle B of Pub. L. No. 115-232) directs DOC to establish export controls on “emerging and foundational technologies” essential to U.S. national security. DOC issued its first such regulation in January 2020, imposing controls on a specific application of artificial intelligence that would train neural networks to analyze geospatial imagery.12
Finally, with regard to tracking outcomes, the Technology Transfer Commercialization Act of 2000 (Pub. L. No. 106-404) revised the technology transfer reporting requirements for federal agencies, requiring that they submit an annual report to the Office of Management and Budget summarizing their
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11 CRADAs are codified in 15 U.S.C. § 3710(a), in which they are defined as “…any agreement between one or more Federal laboratories and one or more non-Federal parties under which the Government, through its laboratories, provides personnel, services, facilities, equipment, intellectual property or other resources with or without reimbursement (but not funds to non-Federal parties) and the non-Federal parties provide funds, personnel, services, facilities, equipment, intellectual property, or other resources toward the conduct of specified research or development efforts which are consistent with the missions of the laboratory….”
12 15 C.F.R. Part 774 (Docket No. 191217–0116) R.I.N. 0694–AH89 Addition of Software Specially Designed to Automate the Analysis of Geospatial Imagery to the Export Control Classification Number 0Y521 Series, Federal Register Vol. 85, No. 3, pp. 459–462 (January 2020).
technology transfer activities. These reporting requirements are discussed in greater detail in Chapter 7.
CONCLUSION
Over the years, Congress and the executive branch have sought to reduce barriers to and promote partnerships between and among federal laboratories, academia, and industry. Positioned between industry and academia, federal labs play a unique role in these partnerships with respect to time scale, risk tolerance, facilities, and the size of the research teams. Today, a growing network of institutional arrangements is focused on enabling the transfer of federally funded research and innovation to benefit society. Federal labs—both GOGO and GOCO—possess scientific expertise that, together with their sophisticated, world-class scientific facilities, makes them crucial national resources for scientific discoveries, technological innovation, and education.
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